ELITIST HANDS IN THE COOKIE JAR
MEDIUM RARE
By Jim Rarey
May 17, 2002
In this writer’s February 27th article this year, "Enronitis – A
Communicable Disease" the following statement was made. "If the Enron
practices are as widespread in other companies, as some believe, we may be
seeing a domino effect with Enron and Global Crossing only the beginning. "
At that time, only Enron and Global Crossing, along with their mutual
auditor/consultant Arthur Andersen, were under the microscope of public and
Security and Exchange Commission (SEC)) scrutiny. At this writing there are
at least thirty (and counting) companies that have admitted "accounting
irregularities" and/or which are the subject of formal investigations by the
SEC.
These disclosures should by no means be considered "voluntary mea culpas."
The Federal Energy Regulatory Commission (FERC) along with the SEC seem to
have awakened from a decades long slumber and are giving the perception of
vigorously pursuing accounting irregularities and other questionable
corporate practices. The FERC compiled a list of suspect practices gleaned
from testimony by Arthur Anderson and Enron officials and sent out a
questionnaire to 150 energy companies. The companies were required to
answer, under penalty of perjury, whether or not they were engaging in any
of those practices. Ergo, a flood of disclosures.
Wall Street analysts estimate that over one trillion dollars in the value of
those companies’ stocks has vanished and that doesn’t count the billions
(perhaps hundreds of billions) of dollars in bonds for which an accounting
is yet to be made. Enron has notified the SEC that it may have overstated
its assets last year by as much as $24 billion and that its financial
statements as far back as 1997 are not reliable. The company did not even
attempt to file the required reports for the quarter ended in March.
The "problems" are not limited to energy producing and trading companies.
Implicated in the scandals are retailers like K-Mart (a FBI criminal
investigation), security analysts, brokerage houses, insurance companies,
auditors and consultants, large investment banks and even bond rating
services. Banks like CitiGroup, Credit Suisse First Boston and J. P. Morgan
Chase find themselves victims of their own greed in participating in the
scams as well as targets of lawsuits and investigations by hapless investors
and regulatory agencies. It almost seems like a game of musical chairs where
there were not enough chairs when the Ponzi schemes collapsed. Companies
like Enron and Global Crossing, although in bankruptcy, ended up with most
of the money for which an accounting has not yet been made.
The maze of sham transactions has set insiders against each other in a
scramble to cut losses and point fingers. We are treated to the spectacle of
a subsidiary of the Rockefeller controlled CitiGroup (Travelers’ Insurance)
suing its own parent company for losses on transactions it insured between
CitiGroup and Enron. CitiGroup is refusing to pay claiming it was misled.
Along with the regulatory agencies, corporate boards of directors seem to
have been asleep at the switch. Some very powerful and well-connected
directors are now claiming they were misled by company executives and/or
auditing firms. Many are members of the premiere U.S. organization pushing
world government, The Council on Foreign Relations (CFR). Others are
associated with one of the CFR’s many spin-offs or organizations controlled
by CFR members i.e. The Trilateral Commission (TLC) and the Business
Roundtable.
Boards of directors are not necessarily controlled by their chairmen. If the
chairman himself does not fill the role, we usually find on the board
someone from an investment bank or a high-powered law firm. What counts is
who controls or influences the voting stock of the company.
So let’s take a brief tour of some of those powerful men (and women) on
boards of companies who were so easily "misled." We shall start and end with
Enron. Enron’s (former) Chairman and CEO, Ken Lay, was a close associate of
both Bill Clinton and the George Bushes. He is a member of Rockefeller’s
Trilateral Commission
Wendy Gramm is a member of the audit committee of Enron’s board. Just prior
she was a Reagan appointee as chairman of the Commodity Futures Trading
Commission, the powerful regulatory agency which oversees the nation's
commodities and futures exchanges. Her husband is Senator Phil Gramm who
sponsored legislation providing partial protection of professional firms
like Arthur Andersen from class action suits. Gramm has decided not to run
for reelection.
In our neighbor to the north a large bank got caught with huge losses when
the Enron music stopped. The Canadian Imperial Bank of Commerce (CIBC) has
on its board Lord ((Conrad M.) Black. An unabashed globalist, Black on his
official biography lists memberships in the Council on Foreign Relations and
the Bilderbergers (evidently that’s what they call themselves).
Canada’s largest energy company EnCana, which engaged in sham "round trip"
transactions with Reliant Energy lists on its board T. Don Macy. Macy is the
former Chairman and President of Amoco Eurasia Petroleum Co. In 1996 he
signed an oil development deal with the Azerbaijan government joining a
consortium for exploitation of Caspian Sea oil. Amoco and Unocal control
55.5% of the consortium.
Returning to the U.S., Rockefeller controlled CitiGroup (including
subsidiaries CitiBank and Traveler’s Insurance) is a major player in the
Enron scandal. Director Robert Rubin (CFR) is chairman of the firm’s
executive committee that runs the group between annual board meetings. Rubin
is the former U.S. Secretary of Treasury and a former CEO of Goldman Sachs.
CitiGroup director C. Michael Armstrong (CFR) is chairman and CEO of AT&T
Corporation. He is the former chairman and CEO of Hughes Electronics. During
his tenure there, Hughes and Loral illegally furnished classified rocket
technology to the Communist Chinese government.
Another CitiGroup director is John M. Deutch (CFR), former head of the CIA.
Deutch resigned his CIA position after he was caught with unauthorized
classified information on his laptop computer. He is also a director on the
board of CMS Energy, which has admitted to sham transactions with several
other energy companies.
CitiBank was caught laundering hundreds of millions of dollars in cocaine
money through the private account of the brother of the Mexican president.
The only consequence was the resignation of a vice president.
The Security and Exchange Commission (SEC) played a large role in enabling
the Enron scams. Arthur Levitt, the New York Democrat fund-raiser was
appointed chairman of the commission by Bill Clinton. During his tenure, the
SEC granted Enron huge exemptions from security laws. Although Levitt claims
he can’t recall the exemptions, a former SEC regulator told Insight Magazine
Levitt was involved in the decision. Experts say the exemptions allowed
Enron to set up its sham offshore partnerships that played such a large role
in the meltdown. Levitt is now a senior analyst for the Carlyle Group.
A book could (and probably should) be written about corporate governance
through former government officials and titans of industry on corporate
boards, of which most are committed globalists. Space considerations have
only permitted a brief sampling of the phenomenon here.
No list would be complete without examining the connections of Herbert S.
(Pug) Winokur, not exactly a household name. Winokur was chairman of the
Enron finance committee. He is a former chairman and CEO of Dyncorp and
currently chairs its compensation committee.
Catherine Austin Fitts has authored a devastating expose of Winokur and his
influence. Fits is a former managing director of the Wall Street firm
Dillon, Reed & Co., a former assistant secretary of HUD and president of the
Hamilton Securities Group. The following information (some of it
paraphrased) is from her expose titled, "Damage Control at Dyncorp – Harm at
Harvard."
Winokur (a Harvard graduate) is a director of the Harvard Corporation and
Harvard Management Company. His investment firm, Capricorn Holdings, is a
lead investor in Dyncorp.
Winokur claims he and other Enron directors were mislead by Arthur Anderson
and Enron management and it legal counsel as to the true nature of its
financial structure. Yet Highfields Capital which manages a large portion of
Harvard’s $19 billion endowment, reaped a quick profit of somewhere between
$50-120 million through short sales (puts) of Enron stock. Fitts suspects
insider trading.
In addition to its contracts with the CIA and State Department, Dyncorp
manages, under contract, much of the financial data and other electronic
records of the SEC, Department of Defense (DOD), Department of Justice
(including the FBI), and the Dept. of Housing and Urban Development (HUD).
Between just two of those departments, DOD and HUD, over $3 trillion dollars
cannot be accounted for by auditors since 1997. Fitts asks the question,
"Could it have moved through the 300-plus subsidiaries that Enron operated
in the Cayman Islands?"
And who are the auditors? Dyncorp, DOD and HUD all use Arthur Andersen. In a
letter directed to Winokur, Fitts asks him how he can allow Dyncorp to
continue to us Arthur Andersen while he claims the auditors misled (lied to)
him at Enron.
In closing, Fitts laments (justifiably)," Still worse yet, while most
activists are trumpeting the dog and pony show being given by Congress, the
SEC and the General Accounting Office (GAO), full of blustery rhetoric and
convenient outrage, what the government and Congress are really doing is
giving the bad guys all the time they need to destroy evidence, transfer
assets, and hide the money."
Permission is granted to reproduce this article in its entirety.
The author is a free lance writer based in Romulus, Michigan. He is a former
newspaper editor and investigative reporter, a retired customs administrator
and accountant, and a student of history and the U.S. Constitution.
|